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What are social goods?

Updated on March 31, 2013

The idea of social/public goods is derived from ancient Greek ideas of community and polis, with people working together with synergy to achieve a common good for society. With polis, there are public interest issues including private benefits and actions of government that come at a public cost (i.e. land use, minimum wage), and social benefits that necessitate private sacrifices (i.e. minimum wage, unemployment, construction of an airport that means more convenience as well as noise, employer-mandated health insurance). Both impact the common good in different ways, and you can create and develop social goods that benefit society.

You can produce public goods without using public funds, like increasing neighborhood safety when residents buy alarm systems or live in a gated community; this results in less money needed to be spent for public safety and law enforcement.

Mixed goods are an example of social goods combined with private goods, in that benefits are both personal and societal. Public immunization is an example; both the immunized individual as well as the public benefit. School vouchers can be positive or negative, depending on the perspectives of different citizens.

Merit goods are privately produced goods that society wishes to encourage because they’re desirable, like Medicare. These can be similar to social goods in that they can be to the public benefit… though things that are desired are not always to the general public benefit. Private goods can be publicly provided.

Unlike private goods, social goods are non-rival in the nature of access; consumption does not diminish its benefit from another use. They are not traded in a marketplace, and you can’t sell public goods in units. For instance, fire services are consumed but are still available for others in the public, while if someone consumes a gallon of milk, no one else can directly benefit from the milk. With private goods, there is the precondition of ownership that doesn’t really exist for social goods. You can’t internalize the costs of privately produced goods.

It’s often difficult to determine whether one citizen has benefited from a service more than another; this can lead to issues of equity, which will be discussed in the last question. There’s the free-rider problem where a citizen gets the benefit of a service or program without paying for it; access is not directly related to tax payments. There is also no private-market mechanism at work for social goods to determine how much of a service should be provided. People are more likely to be excluded through private goods because social goods are often intended for everyone in the public, and should be more accessible.

Other differences between private goods and social goods include quality (where competition in the private sector may encourage better quality in products but also worse quality in a fight for lower prices); created obsolescence (private goods may just be repackaged to be sold and may not actually improve); and values (social goods tend to have the welfare of the public in mind to more of an extent). With social goods, marginal costs aren’t a factor as they are in private markets.

Since they are not traded in a public marketplace, social goods are publicly financed and allocated funding through the adoptive budget process, dependent on things like available funding, cost-benefit, the importance to constituents, the nature of the service (essential or nonessential?), and the beliefs of decision makers. The level of funding determines how much of the social good will be consumed. Part of the function of the budget is to give interest groups a voice in the allocation of funding. These decision makers may determine the burden of who pays versus who receives the service. Social goods may be provided by government in ways that are private (like Medicare, which is government-funded by provided privately) and regulated.


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    • glassvisage profile image

      glassvisage 3 years ago from Northern California

      Hey, thanks for the clarification! :D

    • profile image

      Ditch 3 years ago

      Participedia differentiates between social and public goods, but doesn't define the difference. I came here when searching for the difference but found the two being used interchangeably. I came back to help clarify after I found out the difference elsewhere:

      Public goods - not possible to compete for or exclude them

      Private goods - possible to compete for or exclude them

      Social goods - public can bypass potential competition and exclusivity

    • profile image

      Peripaul 5 years ago

      Great insight! Thanks

    • road2hell profile image

      road2hell 6 years ago from Linden, AB

      Right on! Very interesting and useful!

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      Johnson Iferunwa Margret 6 years ago

      Nice one. Thank you!!

    • profile image

      mohsin pakistani 6 years ago

      great efforts and good working.

      thanks a nice of you!!!!

    • stars439 profile image

      stars439 6 years ago from Louisiana, The Magnolia and Pelican State.

      Great Hub. GBY. Love It.

    • profile image

      Gini 7 years ago

      Good explanation. Bt it is not satisfying me as it should have

    • toknowinfo profile image

      toknowinfo 7 years ago

      Loved the topic! You bring up a lot to think about and I am so glad I found your hubs. Keep up the writing, maybe we can change the world, one hub at a time.

    • lahoriamplifier profile image

      lahoriamplifier 7 years ago from Lahore


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      Howard Schneider 7 years ago from Parsippany, New Jersey

      Well done explanation of social goods. Every society must find their balance between social and private. The right is making the most noise right now excoriating public spending for social goods. This was caused by the stimulus bill and the health care bill. Many feel that the only social good is defense spending which I find absurd. A balance must be found to protect the good life of our society and the allowance of private companies to thrive. Less rhetoric is needed calling every piece of social spending socialism. Less demonizing of the Tea Party is also needed. They are right that we must soon balance our budgets. We need more explanations such as yours to find balance.

    • katiem2 profile image

      katiem2 7 years ago from I'm outta here

      What are social goods is great, I enjoyed your insightful report on this topic and learned a thing or two and even better will leave with a fresh new outlook on social needs in terms of social goods verses private goods. Thanks and Peace :)

    • MariannGood profile image

      MariannGood 7 years ago

      Interesting reading. Thank you!

    • barryrutherford profile image

      Barry Rutherford 7 years ago from Queensland Australia

      interesting read...

    • glassvisage profile image

      glassvisage 7 years ago from Northern California

      Thank you all for your comments, Ralph Deeds, Hello, hello, maven101, tonymac04, and The Rising Glory, and for greatly contributing to the quality of this Hub! This was a pretty cursory summary, and your input is very valuable :)

    • The Rising Glory profile image

      The Rising Glory 7 years ago from California

      Well said maven101...I agree with you completely

    • tonymac04 profile image

      Tony McGregor 7 years ago from South Africa

      A really interesting analysis that is thoughtful and engaging. Lots to think about.

      Love and peace


    • maven101 profile image

      maven101 7 years ago from Northern Arizona

      Many of the social goods mentioned can be provided without government fiat and oversight...Providing numerous bureaucracies to administer certain social goods services has resulted in the creation of a permanent underclass dependent on government largess and bereft of incentives to change...The smallest minority of all, the individual, is becoming a threatened species...Larry

    • Hello, hello, profile image

      Hello, hello, 7 years ago from London, UK

      Thank you for an informative read. Very well written hub.

    • Ralph Deeds profile image

      Ralph Deeds 7 years ago from Birmingham, Michigan

      Nice hub. Seems to me this country has a shortage of support for social goods greater now than any time in memory.